Members of the British National party have set up a front organisation in an attempt to raise money from far right sympathisers in the United States.

An investigation by the Guardian has revealed that the fundraising group Civil Liberty, which claims to be independent of any political party, is run by key BNP activists with all the money donated through its website going to the BNP's regional headquarters in the north-east.

It has raised concerns that the party appears to be attempting to profit from anti-Islamic sentiment in the United States since the attacks of September 11 2001, by presenting itself as being at the forefront of a campaign to save the UK from being "overwhelmed" by Muslims.

Since 2001 it has been illegal for any political party to accept overseas donations of more than £200, and party officials breaking the law face a year's imprisonment or a £5,000 fine. Both Civil Liberty and the BNP deny they are trying to bypass UK election law, insisting they are entirely separate organisations .

However, the Guardian has established a series of links, including an audio tape of the BNP chairman, Nick Griffin, speaking at a US conference organised by a former member of the Ku Klux Klan, in which he calls on sympathisers to support BNP members by giving money to Civil Liberty.

"Please throw money at the BNP, actually don't throw money at the BNP. Quite seriously it's against the law, but you can as my colleague will be telling you tomorrow, throw money at a group called Civil Liberty which helps members of the BNP and that is within the law."

The Guardian also found that:

· Civil Liberty was set up and is run by Kevin Scott, who until September was the BNP's north-east regional organiser.

· Its PO box address is registered to Tyneside BNP at the home of Jonathan Keys, a former party candidate.

· The site's domain name is registered at the home in Stirling of Steve Blake, the BNP's website editor.

· The BNP's head of administration, Kenny Smith, is named on the BNP website as the national treasurer of Civil Liberty and responds to emails sent to CL.

It is not clear how much money Civil Liberty has raised as its accounts are secret, but the American Friends of the British National party was estimated to have raised £80,000 to £100,000 for the BNP between 1998 and 2001 when it folded - money Mr Griffin said made a "significant contribution to the BNP's [2001] general election campaign".

Yesterday the BNP and Civil Liberty strenuously denied the allegations.

"Civil Liberty is completely independent of the party," said BNP spokesman Phil Edwards. "The BNP receives absolutely no money at all from Civil Liberty and any allegation that [money is being diverted] to the BNP in order to circumvent election laws will be met by a libel writ."

In a statement posted on its website, Civil Liberty stated: "Civil Liberty has never given, nor will give a single penny to the BNP. To do so would be in breach of electoral legislation which is clear and strict about who can provide funds to a registered political party. All the money received from generous donors at home and abroad goes to persecuted individuals who have nowhere else to turn to, to assist with legal expenses of employment tribunals and other court costs."

Yesterday a spokeswoman for the Electoral Commission, which monitors political funding, said: "It is illegal for political parties to accept donations from overseas. We will look at these allegations."

Civil Liberty regularly advertises in BNP publications and has appealed for funds on the BNP website. Mark Collett, who was last year acquitted with Mr Griffin on charges of inciting racial hatred, is alleged to have handed out Civil Liberty flyers at a far right event in the US. And at the BNP's annual conference in November, senior BNP figures accused the leadership of using Civil Liberty to build a fighting fund they said was not declared to the Electoral Commission or the wider membership.

Mr Edwards said: "Civil Liberty is an organisation which was set up to assist nationalists fight legal cases and employment tribunals and other civil cases ... The fact that it is Kevin Scott [who set up Civil Liberty] ... why shouldn't it be?"

He said that being a member of the BNP did not stop people handing out leaflets. As to the PO box for Civil Liberty being the same as for Tyneside BNP, "A PO box ... is purely and simply a facility. It doesn't mean there are any links - you are clutching at straws," he said.

Lord Dholakia, deputy leader of the Liberal Democrats in the House of Lords, said: "I am concerned that money raised abroad may be used to sustain political activities of the BNP in the UK and there is a clear need to investigate links between the BNP and Civil Liberty." He has written to the Home Office and the Electoral Commission calling for an investigation.

Civil Liberty's website describes the UK "as one of the most repressive regimes in the world". In its "US appeal" section it calls on American sympathisers to hand over money to help the fight against the spread of Islam. "If you know that Islam has waged holy war from Arabia to Lower Manhattan for 1,400 years, aiming at the forcible conversion of the world ... if you remember 9/11, you will understand why this is the crucial issue of our time."

Who's who

Kevin Scott

Founder of Civil Liberty and until September the BNP's north east regional organiser. He has a conviction for assault and using threatening words and behaviour.

Kenny Smith

Civil Liberty's national treasurer and the BNP's administrator. Based in Scotland, Smith helps Scott run Civil Liberty's website. He is also editor of the BNP's internal membership bulletin, British Nationalist.

Jonathan Keys

A BNP activist in the north east. The Civil Liberty website uses a PO Box which is registered to Tyneside BNP at Keys' home.

Steve Blake

Blake is responsible for the BNP website. He is an IT consultant and the Civil Liberty domain name is registered at his home in Stirling.